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How to treat Gopvernment Grants in accounts for NPO?

Dear Student, Government Grants are of two types:
1. General Grants: These are treated as Revenue receipts, hence, are shown on the Income side of Income and Expenditure Account.
2. Special Grants: These are treated as Capital Receipts, hence, are shown on the Liabilities side of Balance Sheet.

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The government grants r of 2 types :-

1. maintence grants:- these are treated as income and are recorded on income side.

2. development grants:-it is shown as liability in the balance sheet .

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If the govt. grant is received for a specific purpose so it will be liability and if in the question no purpose is mentioned so it will be written in income side of income and expenditure account

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